Red tide.

The budget deficit at the county's Department of Health Services, already projected to hit $340 million in two years, could get a lot worse because of problems at Martin Luther King Jr./Drew Medical Center.

That was the prognosis last week by county health officials as they presented a department fiscal update to the Board of Supervisors.

"I think you described it best in calling it a nightmare," said Fred Leaf, chief operating officer of the department, in responding to a supervisor's question.

Federal officials are threatening to withhold $200 million in annual funding from the facility unless administrators and staff can demonstrate they know how to properly handle aggressive mental patients who have been shot with Taser guns in violation of federal regulations.

Such a loss of funding--about half the facility's annual budget--wouldn't necessarily shut down the hospital. However, the loss of funding would have a have a devastating financial effect on the system, likely creating big budget deficits for the department in the fiscal year starting July 1, Leaf said.

Projections released by county health officials indicate that the department should have a year-end balance of $45 million in the 20052006 fiscal year, but that will turn into a $341 million shortfall by the next fiscal year even without the loss of federal funding at MLK.

Staff reporter Laurence Darmiento can be reached at [phone], ext. 237, or at [e-mail].